Take control of your phone bill2:01

Telstra will stamp out new services from charging its customers via third party billing by December. Picture: Michael DodgeSource:Getty Images

TELSTRA is set to kill off controversial third party charges for consumers on postpaid plans by December after customers complained of getting hit with unexpected third party charges on their monthly mobile bill.

Such charges typically relate to third party subscription purchases of content like mobile games, apps, and videos which involve recurrent charges on a weekly or monthly basis and turn up included on your mobile bill.

“This has been a pain point for our customers for quite some time,” Kevin Teoh, Telstra’s Director of Consumer Mobiles told news.com.au. “In many cases customers are inadvertently signing up to these services.”

Telstra says it has been looking at ways to address customer grievances around the controversial billing practice in recent years. The telco previously directed third party service providers to improve sign up processes which can often be predatory, and last year mandated a double opt-in process for Premium SMS content.

“Some customers continued to tell us they received subscription charges for content that they don’t believe they signed up for, so we have now taken this extra step,” Telstra said.

From December 3, third party service providers will no longer be permitted to charge new mobile content subscriptions to Telstra customers on their monthly bill.

“Historically, it has been very easy” for third parties to charge services to people’s mobile bills but “an unacceptable amount” of customer complaints prompted Telstra into action, Mr Teoh said.

Telstra customers with existing subscription services will continue to operate past the December deadline and Telstra will continue to support one-off payments like charity donations and voting for TV game shows.

According to a survey commissioned by the Australian Communications Consumer Action Network, conducted in April, 12 per cent of Aussie mobile users had been hit with unexpected third party charges in a six-month period.

“Applied to the mobile customer base of Telstra, Optus and Vodafone, this 12 per cent equates to almost 1.9 million people who could have received unexpected charges on their mobile bills,” ACCAN Director of Policy, Una Lawrence said last month.

“We estimate that collectively, consumers may have been charged as much as $20 million unexpectedly in the last six months.”

Many consumers aren’t even aware that certain online activity — such as buying games or voting on TV shows — could be charged to their mobile accounts, the survey found.

However Vodafone was quick to point out that it hasn’t offered third party billing subscriptions for premium SMS services since 2015.

“Our industry-first move, combined with other efforts to provide additional safeguards for our customers, have seen a consistent year on year reduction in complaints about third party services,” a Vodafone spokesperson said.

The controversial charges usually fall into two categories: direct carrier billing and Mobile Premium Services that consumers may subscribe to by calling or texting a 19X number or by subscribing on a website. When signing up to such things, texts sent and received are charged at a premium rate, as much as $5.50 per text received.

Telstra customers will still be free to purchase subscription mobile content using alternative payment methods, however the current arrangement where a customer can elect to purchase a subscription for third-party content and charge it to their Telstra bill will end.

Mr Teoh said that after informing third party providers who often rely on this billing mechanism, he has been working with them to “transition them to a more customer friendly method.”

He also said Telstra was working with its content partners to ensure there was not a mad rush by the industry to spam customers with links to sign up for services before the December 3 deadline. “It was very clear,” Mr Teoh said.

The move has been welcomed by consumer groups like ACCAN. “We congratulate Telstra on stepping up and taking action to stop their customers from getting slugged by unwanted third party subscriptions,” the organisation’s CEO, Teresa Corbin said.

“Consumers have had to put up with these unexpected charges far too long.”